PETER SCHWEIZER, AUTHOR, "CLINTON CASH": It's so hard when you look at the Clintons to try to figure out where the charity ends and begins, where their profit-making ends and begins, and where their officials powers as secretary of state or senator ends and begins.

WALLACE: We'll talk with Peter Schweizer, author of the explosive book "Clinton Cash", in his first live interview. Then, a Clinton insider responds to the allegations. Do you ever get tired of cleaning up after the Clintons? Former White House special counsel Lanny Davis is back to deal with this latest Clinton controversy. Plus, a U.S. drone strike mistakenly kills two Western hostages held by al Qaeda.

PRESIDENT BARACK OBAMA: As president and as commander-in-chief, I take full responsibility for all of our counterterrorism operations. I profoundly regret what happened.

WALLACE: Our Sunday group weighs in on whether the president's counterterrorism strategy needs to be changed. And our power player of the week, Dr. Francis Collins, head of the National Institutes of Health.

DR. FRANCIS COLLINS, NATIONAL INSTITUTES OF HEALTH: We are the house of hope. This is where people come to when everything else stops working.

WALLACE: All, right now, on "Fox News Sunday."

(END VIDEOTAPE)

WALLACE: And hello again from Fox News in Washington. Well, it's the old adage -- follow the money. And in the case of Hillary Clinton, who just launched her presidential campaign, following the money has led to some troubling questions. Today, we want to drill down into the controversy with Peter Schweizer, author of the new book, "Clinton Cash," here for his first live interview. But first, "Special Report" anchor Bret Baier, who's been leading Fox News reporting on the book, has the highlights -- Bret. (BEGIN VIDEOTAPE)

BRET BAIER, SPECIAL REPORT ANCHOR: Chris, the dealings of Bill and Hillary Clinton are part of what "Clinton Cash" author Peter Schweizer calls the Clinton blur, a mix of money and politics, diplomacy and personal interests all so interconnected that it's pretty easy to get lost. From lucrative construction deals given to Hillary friends and family after the earthquake in Haiti to $500,000 and $750,000 speeches for Bill Clinton paid for by countries or foreign companies with some action or policy in front of his then-secretary of state wife, to a major uranium mining deal for Clinton friend Frank Giustra, a deal with the country Kazakhstan that is finalized during a Giustra trip with former President Clinton.

JO BECKER, THE NEW YORK TIMES: And then soon after that, Bill Clinton got a huge donation, $31 million from Frank Giustra, to his charitable foundation, followed by a pledge to donate $100 million more. BAIER: The company became Uranium One, and was eventually sold to a Russian company that is essentially controlled by Vladimir Putin. They now also control more than 20 percent of American uranium. Officials with Uranium One and investors who profited from that deal donated more than $140 million to the Clinton Foundation. But millions of dollars of those donations were never disclosed, flying in the face of a deal the Clintons struck with the Obama administration. Again, and all of this does not fit on a bumper sticker, but from the book and various media organizations like The New York Times, The Washington Post and Fox News, connecting some of the dots here, most political watchers will tell you, this is, at best for Hillary Clinton, a serious political issue for her campaign -- Chris.

WALLACE: Let's start with the phrase that Bret mentioned you use in the book, the Clinton blur, the mix of private and public, of charity and government action. What's your point?

SCHWEIZER: The point is basically when former President Clinton travels the world, which he does extensively, he spends time in the developing world, in Europe. When he goes there, he's usually wearing several hats. When his wife was in public office, he's obviously the spouse of a very public figure, he's the head of a charity, he's also giving speeches and he's probably there with an entourage that includes foreign businessmen that have matters before the government, in Colombia, or Kazakhstan, or wherever it may be. And the problem is, when you have a mix of public and private, profit-making backed by the government power that your spouse has, I think it creates a very dangerous cocktail as far as conflict of interests is concerned.

WALLACE: Well, you have an interesting point that I want to put up on the screen that seems to demonstrate exactly the point you're making. Between 2001 and 2012, Bill Clinton made 13 speeches, 13, for which he was paid, $500,000 or more. Eleven of those 13 speeches were at least eight years after he left the presidency while his wife was secretary of state. Peter, what do you think that shows?

SCHWEIZER: Well, I think you can only come to one or two conclusions. Either in January of 2009 when Hillary Clinton becomes secretary of state, former President Clinton has become dramatically more eloquent than he ever was. He's a very eloquent man.

WALLACE: Because his speaking fees went dramatically up.

SCHWEIZER: Dramatically. I mean, for example, in the uranium deal, there's a $500,000 speech that he's paid by an investment banking firm that is tied to Putin. He was paid $500,000. He had only given one speech in Russia before that five years earlier, for which he was paid a third of that. So, the question becomes, why did his speaking fees go up and why did it go up with corporations and with individuals and with people connected to foreign governments who had business before the State Department?

WALLACE: What's your answer?

SCHWEIZER: My answer is that's extremely troubling. The fact you find it's a very extensive pattern. There's not one or two examples. There are 11 instances and I think when you have one or two examples, it's a coincidence. When you have this many, to me it's a trend.

WALLACE: OK, let's go through a timeline, and it's complicated. But a timeline of the uranium deal that you -- that Bret mentioned and you reported in the book. 2005, Bill Clinton and Canadian millionaire Frank Giustra fly to Kazakhstan. Giustra lands a big uranium mining deal. Giustra gives the Clinton Foundation $31 million and later pledges $100 million more. 2010, a Russian company wants to buy Uranium One, which has taken over Giustra's company. The new chairman of Uranium One donates $2 million to Clinton foundation, which fails to report that money. In June of 2010, Bill Clinton gets $500,000 for a speech in Moscow. In October, a U.S. government committee approves the sale of Uranium One to the Russian company. Question, is there a connection between always of those millions of dollars that are going to Clinton personally and to the Clinton Foundation and State Department's approval of this uranium deal?

SCHWEIZER: I believe there is. It's not just Frank Giustra. I lay out in the book, there are actually nine, nine major donors to the Clinton Foundation who had written multimillion checks that are tied to this deal. The two financial advisers that arrange for the sale of Uranium One to the Russian government, they're both major Clinton contributors. The chairman of the company is, some of the key shareholders are. The question becomes, when CFIUS approved this transfer in October, what role did Hillary Clinton play?

WALLACE: OK. And CFIUS is that the committee that approves in October of 2010 the sale to Russia.

SCHWEIZER: Right.

WALLACE: Or the Russian company with close ties to Vladimir Putin. This is precisely the point that the Clinton campaign has hit back on hard, because CFIUS is a committee of nine agencies. Not just the State Department.

SCHWEIZER: Correct, yes.

WALLACE: Nine separate agencies and they point out there's no hard evidence, and you don't cite any in the book that Hillary Clinton took direct action, was involved in any way in approving as one of nine agencies the sale of the company?

SCHWEIZER: Well, here's what's important to keep in mind: it was one of nine agencies, but any one of those agencies had veto power. So, she could have stopped the deal. So, what's interesting about this, of all those nine agencies, who was the most hawkish on these types of issues? Hillary Clinton. She had a reputation going back to the Dubai Ports deal. At this time also in 2000 --

WALLACE: We should just quickly point out, this was I think in 2005 that the United Arab Emirates are buying several American port. She was then a U.S. senator and she said, we shouldn't have foreign companies buying huge U.S. assets.

SCHWEIZER: Yes, critical assets. And I think uranium would fit that bill. What's also happening in 2010, basically they're claiming she didn't know about this deal. In 2010 when this deal is going down, she's responsible for the A123 civilian nuclear negotiations with the Russian government. She's point person with Russian reset. You've got four senior members of Congress who have written a letter expressing concerns about this deal.

WALLACE: But, again, if I may, you don't have a single piece of evidence that she was involved in this deal, that she sent a memo to the person -- the State Department representative who was on this committee and said, hey, we want to approve the Uranium One sale.

SCHWEIZER: I am a journalist, and so, I don't have access to government records. I certainly don't have access to her e-mails. It doesn't seem like anybody does. But the fundamental question is, with this deal and the others we cite in this book, is it coincidence -- is it coincidence in a pattern we see repeated dozens of times where large Clinton supporters are -- have business before the State Department. They make large payments and favorable actions are taken. I don't think that coincidences occur that frequently.

WALLACE: All right. Let's take another one of your case studies. And that is Haiti after the devastating earthquake there in 2010. Bill Clinton goes to Haiti and becomes co-chair of the Haitian Relief Committee which approved millions of dollars in new projects, part of the relief. In 2010 and '11, Digicel, a mobile phone company, gets more than $2 million in U.S. taxpayer money to set up a money transfer program in Haiti. The company's owner, Irish billionaire Dennis O'Brien, arranges four speeches for Clinton for $825,000 and also contributes between $1 million and $5 million -- because that's the disclosure, there's no more definite than that -- between $1 million and $5 million for the Clinton Foundation. Peter, again, it doesn't look good but what evidence do you have that Bill Clinton helped -- first of all, that he did anything to steer this project to Digicel and he did it for the good auspices of this a rich billionaire who got him these good speeches.

SCHWEIZER: Well, again, I was not subject to the conversations they had. I did not have access to internal memos, but again, you see this pattern of benefit. And I think that's really the key question. The analogy I would use it like insider trading. I wrote a book a couple years ago on members of Congress who were potentially engaged in insider trading. When you talk to prosecutors, they will tell you, most people that engaged in insider trader don't send an e-mail that says, I've got inside information by this stock. The way that give prosecutors, by looking at the pattern behavior, did somebody who has access to the information conduct a series of well-timed stock trades that warrants further investigation? And that's my contention here, that you see a series of actions that enormously beneficial. In some cases, Hillary Clinton is reversing course on policies that she embraced before for the benefit of Clinton donors and I'm saying, this warrants investigation.

WALLACE: Do you think -- you're not a lawyer.

SCHWEIZER: Right.

WALLACE: And as you say, it warrants further investigation. Do you think the Clintons committed a crime here? Do you think they were guilty of bribery?

SCHWEIZER: I'm not a lawyer. What I would say, though, is if you look at the case of Governor McConnell in Virginia --

WALLACE: McDonnell.

SCHWEIZER: McDonnell, yes, McDonnell in Virginia. You look at Senator Menendez in New Jersey, there's no quid pro quo in those cases. They were simply prosecuted, and I think justifiably so, on the grounds that there was this pattern of gift giving which led to --

(CROSSTALK)

WALLACE: -- there, though, in the case of McDonnell in Virginia and Menendez, there's an indication they took direct action themselves.

SCHWEIZER: Correct.

WALLACE: There's no indication that Hillary Clinton or Bill Clinton took direct action. I mean, it's a coincidence or some could say it's more than that, but you don't have the direct action.

SCHWEIZER: Well, I think they discovered the direct action in those cases once law enforcement began the investigation. And that's my point. My point, as I think you pointed out and I state clearly in the book -- I don't have subpoena power. I'm an author. I'm looking at pattern of behavior, and patterns of conduct of funds, and I'm saying this warrants further investigation.

WALLACE: All right. There's one other case -- there are a lot but one other one I want to get into you with and that is VCS Mining, which was a startup company, which was granted for the first time in 50 years a permit for open pit gold mining in Haiti. One of the board members of VCS Mining was a fellow named Tony Rodham, there he is, Hillary Clinton's younger brother, who has absolutely no background in mining.

SCHWEIZER: Right, exactly. This is again another example where you see this timing question. Tony Rodham meets with VCS Mining officials at a Clinton Global Initiative event in 2012. A couple months later, they're granted permit by Haitian government, very difficult to get, only two of them granted in the last 50 years. And then, lo and behold, Tony Rodham is added to the board. You could look at that and say, it's coincidence. But again, as you see a chain of events repeated over and over again from Colombia to Kazakhstan to Africa, that's what I think is so troubling.

WALLACE: As I said, the Clinton campaign has gone hard after you and your book. Here is Clinton campaign chairman John Podesta.

(BEGIN VIDEO CLIP)

JOHN PODESTA, HILLARY CLINTON CAMPAIGN CHAIRMAN: He's cherry-picked information to be disclosed and woven a bunch of conspiracy theories about it. The fact, there's nothing new about the conspiracy theories. I guess, he'll -- you know, we'll get to judge when we read the book.

(END VIDEO CLIP)

WALLACE: Your response.

SCHWEIZER: They're not conspiracy theories. I don't get in theorizing. And he's incorrect. I mean, one of the big finds in the book is you have multimillion dollar donations that were never disclosed. The thing that we have to keep in mind is the Clintons tried to say they're very transparent. The reason they're transparent with the foundation is the Barack Obama transition team in 2008 insisted on disclosure. The Senate Foreign Relations Committee insisted that they disclose donations. As The Wall Street Journals and The New York Times confirmed on Thursday, there were multimillion dollars donations that were never disclosed, and those were the only ones we were able to find by going through a Canadian tax records.

WALLACE: The Clinton camp notes that you work for George W. Bush in his White House. They note you also work for the conservative news Web site, Breitbart, and what they say, in effect, this is a right wing hit job.

SCHWEIZER: Well, it's an interesting statement. The two previous books I've done, "Throw Them All Out," which looked at insider trading and self-enrichment by members of Congress. And, you know, I highlighted prominent Republicans, people like Dennis Hastert, the Republican chairman of the House Financial Services Committees and his stock trades, and the more recent book "Extortion" was -- I was criticized by John Boehner because I looked at his fund-raising practices which I consider extortive. So, you know, the facts are the facts. And when we finished researching and writing this book, I went to investigative units at New York Times, Washington Post, at Fox News and ABC, precisely because I wanted this evidence to be evaluated and looked at. To not be seen in partisan terms. These are not cupcakes. These are not partisans. These are serious journalists and they are confirming the reporting that we found.

WALLACE: Finally, is it true, because it's been reported this week, that you are looking into Jeb Bush's finance when he was governor of Florida? If so, what have you found?

SCHWEIZER: We've been looking at it for four months. We've got researchers on it. We are continuing. We actually talked previous to the book sort of coming out being exposed. We talked to media outlets. We're looking at everything from an airport deal in North Florida, to land deals in South Florida, to education fundings and connection to Jeb Bush's education foundation, whatnot. We're not prepared to release that but we will in the coming months.

WALLACE: Are you seeing connection with groups that have interests with the government and money coming in?

SCHWEIZER: Yes. It's a common story, unfortunately. We see both sides of the aisle engaged. With the Clintons it's more global in scale because they are global actors. Yes, there's no question we see a similar pattern emerging. It's too soon to tell exactly the full ramifications of what those findings will be, but we'd be glad to come back and report on them.

WALLACE: We'll be glad to have you. Peter, thanks for coming in today.

SCHWEIZER: Thanks for having me.

WALLACE: For more on this, you can see the full documentary, "Fox News reporting: The Tangled Clinton Web" tonight at 10 p.m. Eastern on the Fox News Channel. But up next, reaction from Clinton insider, special counsel Lanny Davis, on whether Bill or Hillary Clinton did anything wrong.

(COMMERCIAL BREAK)

WALLACE: A look outside the beltway at the Brooklyn New York site of Hillary Clinton's campaign headquarters. Well, the Clinton camp has been quick to dismiss Peter Schweizer's new book as a partisan smear, but they declined our invitation for an interview today. However, former White House special counsel Lanny Davis has agreed to talk. While not a campaign spokesman, he has a long history handling Clinton troubles, advising then-President Clinton on campaign finance and impeachment. Lanny, welcome back to "Fox News Sunday."

LANNY DAVIS, FORMER WHITE HOUSE SPECIAL COUNSEL: Thank you, Chris. WALLACE: Well, let's start with one of the big points that Peter Schweizer makes in his book. How do you explain Bill Clinton's speaking fees went up after his wife became secretary of state and the fact that of the 13 speeches he's made since he left the White House for which he was paid $500,000 or more, 11 of those 13 were while she was secretary of state. How do you explain that?

DAVIS: Well, I can't explain why people decide to pay President Bush and other former presidents lots of money. That's their decision. I can tell you that knowing Bill Clinton all these years, that he's worth listening to and because of his activities all over the globe and certainly in the foundation, he's probably worth that amount of money.

WALLACE: But I guess the question is, you would think the market would be that he would be most valuable and most interesting right after he left the White House. In fact, his speaking fee goes up dramatically. And 11 of the 13 biggest speeches were when she was secretary of state. Do you see a link there?

DAVIS: I don't, because it's more logical that right after he got out of the White House, before the foundation's activities and before he did so much good around the world, he's going to be less valuable. But I know that former presidents receive fees of this dimension. So, I'm not shock. But I can't read the motives of people who pay, but I can tell you that Bill Clinton has nothing to do and religiously had a wall between himself and Secretary Clinton when she was secretary of state.

WALLACE: All right. Here's the question -- back in 2009 when Hillary Clinton was going through her confirmation hearing, the chairman of the Senate Foreign Relations Committee Richard Lugar raised precisely this concern. Take a look.

(BEGIN VIDEO CLIP)

SEN. RICHARD LUGAR, R-IN, FOREIGN RELATIONS CMTE CHAIR: The Clinton Foundation exists as a temptation for any foreign entity or government that believes it can curry favor through a donation. It also sets up potential perception problems with any action taken by the secretary of state in relation to foreign givers or their countries.

WALLACE: -- he's giving an explanation of the concern that Clinton's money or money that goes to the foundation may be a way for foreign governments, foreign entities to curry favor with Hillary Clinton as secretary of state. And yet, Bill Clinton continues after that to take millions of dollars from foreign -- for foreign entities for speeches and tens of millions of dollars for the foundation in donations, despite those concerns.

DAVIS: I agree that Senator Lugar asked a valid question and the Clintons responded as if it were a valid question and reached an agreement on making everything transparent. And, in fact, the Clinton Foundation donors are all named -- there are no anonymous donors, unlike other nonprofits. And moreover, I don't think but for a few inadvertent errors they ever violated the agreement on transparency and on taking money from foreign government.

WALLACE: We know because of the reporting in Peter Schweizer's book of one major violation of this, a failure to disclose, and that is that Ian Telfer, who was chairman of Uranium One, that uranium company that the Russians wanted to buy, gave $2.35 million to the Clinton Foundation through his family's Fernwood Foundation, and yet that contribution, $2.35 million -- I mean, I know the Clintons have a lot of money, but that's not pocket change. That contribution was never reported.

DAVIS: Look, we've known each other for a long time. You used the word "major". You're entitled to that adjective.

WALLACE: You don't think $2.35 million is major? DAVIS: Let me finish, you're going to give me 30 seconds. $2.3 million out of $2 billion is not major, even by any definition. And moreover, there is, let's say not on this program to resolve, a fundamental dispute whether Mr. Telfer's $2.3 million was given to Clinton Foundation or another foundation based in Canada that was a fund for social --

WALLACE: In every other case, passed the money straight through to the foundation and what was reported.

DAVIS: As I said, we do not think that was a contribution to the foundation. But if it was, $2.3 million divided by $2 billion, the amount of money the foundation collected over all the years -- to me, $2.3 million divided by $2 billion is not what Chris Wallace call major.

WALLACE: That's what I call major. May not be what Lanny Davis calls major.

DAVIS: I agree. We have a right to disagree on the word "major".

WALLACE: How do you explain a startup, a startup called VCS Mining getting the first permit for open pit mining in Haiti in half a century? And do you think that the fact that Hillary Clinton's younger brother, Tony Rodham, was on the board of VCS Mining, played any role?

DAVIS: I don't think so. I see nothing that suggests that he was the cause of getting that license or influenced it. But the only fact I know of, because this is a new topic for me, so forgive me, is that he arrived on that board nine months after the license was granted. If I'm right about that, then I think you would probably withdraw your innuendo that he was somehow influential as Hillary's brother in getting that license.

WALLACE: Well, I had not heard that. And I -- we'll --

(CROSSTALK)

DAVIS: I'm not sure that's the case but nine months after that license was issued, Tony Rodham was on the board.

WALLACE: How do explain Canadian mining executives giving Clintons millions and a Russian company with close ties to Vladimir Putin giving -- paying Bill Clinton half a million dollars for a speech in Moscow -- his first speech in Moscow in five years, just as the Russian company was trying to get this -- this uranium company and that it had to go through U.S. government approval?

DAVIS: I'll try to do this in less than 30 seconds.

WALLACE: OK.

DAVIS: The standard answer has been there's no evidence of any relationship between those donations to the foundation by Mr. Giustra and the deal that was approved by the CFIUS review panel. But let me give you a stronger statement. There are facts that contradict the influence. Fact one, the Nuclear Regulatory Commission approved this deal. The Department of Treasury, Defense and Energy were on that panel. They approved the deal. The Utah Regulatory Commission approved the deal. And Canadian review panel approved the deal. All facts omitted by Mr. Schweizer this morning, which he should have mentioned.

WALLACE: Do you think it's -- well, we certainly both talked about the fact that CFIUS had nine agencies on it, so that wasn't omitted.

DAVIS: Yes.

WALLACE: Do you think it was a coincidence all these Canadian mining executives are giving millions to the foundation, that a company with close ties to Vladimir Putin's government in Russia is giving half a million dollar speech? Do you think that's a coincidence that's happening while the Russian company that wants to buy Uranium One has business before the State Department? Do you think that's a coincidence?

DAVIS: I don't use the word "coincidence". Of course, it's a coincidence but it's a false inference. It sounds like if two incidents occur side by side, like the rooster crows and then the sun rises, it's a coincidence that the sun rises after the rooster crows. The rooster doesn't cause the sun to rise. In this case, the man on CFIUS states has been publicly quoted, not by Mr. Schweizer, not by The New York Times, that nobody from the State Department, Hillary Clinton never one intervened on that decision or any other decision. That's a fact omitted by Mr. Schweizer.

WALLACE: Well, though, in fact, it's something that Mr. Schweizer and I just discussed in --

DAVIS: Well, the man's name is Mr. Fernandez. What I didn't hear him say, and I take it back if he did say, is that he affirmatively said Hillary Clinton never once intervened on any matter in front of CFIUS. And the only word Mr. Schweizer used was hawkish, I don't know what he means by that. But it didn't involve the Nuclear Regulatory Commission approving this deal not because of Clinton Foundation.

WALLACE: A couple final questions we're running out of time. Is it possible some of the 30,000 e-mails that Hillary Clinton deleted as personal might have been about large donations or speeches?

DAVIS: Look. Anything is possible. You give me a good chance to maybe close on Jeb Bush. If --

WALLACE: No. This is where you and I get in trouble. I'm asking you a question. Is it possible some of the 30,000 e-mails that she deleted summarily had something to do with some of these issues?

DAVIS: I think you misread my statement about Mr. Jeb Bush. It's not what I was going to say as we discussed last time. If Mr. Schweizer is doing a book about Jeb Bush, as I heard him say, all the research he was doing, based upon this innuendo and smoke without facts, Jeb Bush is a decent, honorable man who would never do anything in government because of money. And if he uses that innuendo against Jeb Bush, invite me back and I'll make the same argument that I'm making against the unfair smoke blown about the Clintons that is totally missing the good works the Clinton Foundation has done throughout the years.

WALLACE: Of course, we'll never know whether or not the 30,000 e-mails might have included this because Hillary Clinton deleted all of her e-mails and wiped her server clean. I want to take you back to the last time you were, which is about six weeks ago, early March.

DAVIS: I remember.

WALLACE: Yes. And I asked you whether you thought at that time it would be reasonable for a neutral observer to take a look at her server and all the e-mails. Here's what you say.

(BEGIN VIDEO CLIP)

DAVIS: I think that is a reasonable idea if the State Department asks, she will say yes. If there's a subpoena, she must say yes. This is a bogus notion about what might be the case versus what is the case.

WALLACE: How about --

(END VIDEO CLIP)

DAVIS: Thank you.

WALLACE: But now we'll never know because to use the Nixon analogy, Hillary Clinton burned the tapes.

DAVIS: But thank you very much for airing that because a lot of people wrote that I called for a neutral party. And you heard my words. If a subpoena is issued.

WALLACE: No, you said it was a reasonable idea.

DAVIS: It's a reasonable idea if a subpoena is issued or the Congress asked for it or the State Department asked for it. And at that time I did not know about what I think is an entirely legitimate decision whether made by ...

WALLACE: No, no, here's what you said. I think it's a reasonable idea if the State Department asks ...

DAVIS: If ...

WALLACE: No. If the State Departments asks, she will say yes. If there's a subpoena, she must say yes.

DAVIS: And I, again, was trying to finish the thought, Chris. I said if. I did not know that she made the reasonable decision, which I would make, which (INAUDIBLE) you would make that privacy -- everybody watching knows private e-mails are private and they shouldn't be made public. She made the decision, as everybody in government under law is supposed to, including members of Congress, to separate private from official.

WALLACE: But she also decided to erase the server.

DAVIS: And God bless -- I would like to erase every one of my e-mails and members of Congress do erase -- I'm sure they do, their private e-mails. In this case, Hillary Clinton made a legal decision to separate and then to delete the private e-mails to protect her privacy. And the one thing that she has the right to is the right to privacy.

WALLACE: Of course, she was the one who mixed this all up.

DAVIS: Everybody ...

WALLACE: Wait. But she is the one who mixed this all up by putting her government business on her private e-mail server in -- in contradiction to what the rules of the State Department and of the Obama administration were.

DAVIS: False. That's a false statement. Colin Powell did the same thing.

WALLACE: Really? The Obama administration didn't say that you're supposed to put your government e-mails on -- you are supposed to keep all of government business and government emails? They didn't say that?

DAVIS: The Obama administration rules on that subject we're not violated. And the expert from the agency, the archives administration, the top lawyer said, on a rival network --

WALLACE: No, that was -- that wasn't a question of law -- that wasn't a question ...

DAVIS: He said ..

WALLACE: In any case ...

DAVIS: He said no rule and no law was violated.

WALLACE: You know, it was so civil until the end here.

(CROSSTALK)

WALLACE: But thank you.

DAVIS: Thank you.

WALLACE: And it's certainly more civil than last time. Thanks for coming in, Lanny. Always a pleasure.

DAVIS: Thank you.

WALLACE: Up next, our Sunday group joins the conversation about the allegations against Hillary Clinton and what impact they'll have on the 2016 campaign. And what do you think? How strong is the case that Clintons traded millions in speech fees and contributions to their foundation in return for political favors? Let me know on Facebook or Twitter @foxnewssunday and use the #fns.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

HILLARY CLINTON, SECRETARY OF STATE NOMINEE: My husband doesn't take a salary. He has no financial interest in any of this. I don't take a salary. I have no financial interest.

(END VIDEO CLIP)

WALLACE: Hillary Clinton at her 2009 confirmation hearing pledging transparency to avoid even the appearance of a conflict of interest in her new role as Secretary of State. And it's time now for our Sunday group, Fox News senior political analyst Brit Hume, Julie Pace, who covers the White House for the Associated Press, GOP strategist Karl Rove and Ron Fournier of "The National Journal." Peter Schweitzer in his book lays out a long, detailed money trail where Bill Clinton gets millions of dollars through speaking fees, the Clinton Foundation gets tens of millions of dollars from donations from foreign entities that have interest in part of the State Department. But he's very careful, and he did it again today to say he doesn't have a smoking gun that shows -- that was a quid pro quo. So, based on all of that, how troubling do you think the reporting that he lays out is?

BRIT HUME, FOX NEWS SENIOR POLITICAL ANALYST: Well, the smoking gun requirement would be what you'd be looking for if you're trying to prove a bribe. An outright bribe. But if the standard is even the appearance of a conflict of interest, he's got all of that. I mean, everything that Richard Lugar described in that sound bite that you showed earlier, has now come to pass. The speaking fees that, as you pointed out so well, skyrocketed after Hillary Clinton took office, I'm talking about for Bill Clinton, these donations to the foundation from these foreign governments, many of them unsavory characters at the head of them, this all smells.

Now, can you prove that these were bribes? No. But can anybody reasonably infer that these people were trying to buy influence? Of course. And the Clintons seem oblivious to that possibility or knowing of it and figuring they can get away with it. And then, of course, you have the instances in which the reporting that was supposed to occur to make all this transparent did not. So, you add it all up, it's pretty ugly.

WALLACE: Julie, you know, this was exactly what the Obama White House was worried about when they appointed Hillary Clinton to be secretary of state and, in fact, that's why they negotiated, the lawyers from the White House, the lawyers for the Clintons, negotiated a memorandum of understanding with tight rules of the road about foreign donations, foreign speeches, preapproval disclosure. Do you get the sense the folks at the White House feel that they've been burned by the Clintons on this?

JULIE PACE, THE ASSOCIATED PRESS: I think they feel like they've been put in a tough spot here. Because on the one hand, Secretary Clinton is someone who worked for this administration, the president grew to like her, thought she did a good job as secretary of state. At the same time, they knew when she took that job that there were going to be questions about the foundation. And they thought that they had set something up to deal with that. And now you see that there have been some instances where donations were not disclosed. The e-mail controversy, I think, bothered them even more because this was something that they thought was pretty clear to everybody in the administration.

WALLACE: But let me ask you about what Lanny Davis said and now that we've got you here.

(LAUGHTER)

WALLACE: Did she violate the spirit, if not the letter of the ...

PACE: It's hard to argue that she didn't. I mean it was very clear to everyone in the administration, whatever agency you work at, whether you are at the White House or a cabinet post that you were supposed to keep government business on government e-mail. If email went to your Gmail, you were supposed to forward it to your government e-mail. So, it was pretty clear what was supposed to be done there.

WALLACE: When Hillary Clinton launched her campaign in Iowa the week before last, she said one of her four main goals if she becomes president is to deal with money in politics. Here she is.

(BEGIN VIDEO CLIP)

HILLARY CLINTON: We need to fix our dysfunctional political system and get unaccountable money out of it, once and for all, even if that takes a constitutional amendment.

(END VIDEO CLIP)

WALLACE: Karl, is what the Clintons are involved in here just the inherent role of big money in government or is it something beyond?

KARL ROVE, FORMER BUSH WHITE HOUSE ADVISER: No, this is something beyond that. First of all, let's give her the hypocrite award of the week. Because she was the first presidential candidate to completely bow out of the federal funding system. She said, I'm not going to go under the rules that ultimately I'm going to be receiving about the funds.

WALLACE: OK.

(CROSSTALK)

ROVE: But in this instance -- look, yes, this stinks. And there may -- the judge and jury gets to be every single American. But they will look at this and say, this stinks. The former president goes to Kazakhstan in 2005, stands up next to Nazarbayev and says extraordinarily wrong things about his human rights record and is rewarded with a $130 million contribution from the guy who gets the uranium contracts.

WALLACE: Ron, you talk -- you talked recently about the quote, "seedy side" of the Clinton foundation. What do you find seedy about it?

RON FOURNIER, NATIONAL JOURNAL: I wrote the first story back in February, this was stupid and seedy. It's stupid politically because she's putting herself in a position where people can't trust her and it's seedy because of the obvious, at the very least, perceptions of a conflict of interest. You don't have to be a conspiracy theorist here, Chris, to know that the foreign companies hope to buy influence. You don't have to be a lawyer to know that they violated ethics laws. You don't have to be a historian to know that they have a history of having an ethical blind spot. They being the Clinton. And you don't have to be a political scientist to know that this really undermines the trust that we can have in her as a potential president and if she becomes president, the trust we can have in a leader of our government. This is very bad politics. This is very bad governance.

WALLACE: All right. We have to take a quick break here. When we come back, the other big story this week. Two Western hostages mistakenly killed by a U.S. drone strike. What does it mean for the president's counterterrorism strategy? Plus, what would you like to ask the panel about the use of drones? Just go to Facebook or Twitter @foxnewssunday and we may use your question on the air.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: Before any strike is taken, there must be near certainty that no civilians will be killed or injured. The highest standard we can set.

I profoundly regret what happened. On behalf of the United States government, I offer our deepest apologies to the family.

(END VIDEO CLIP)

WALLACE: President Obama two years ago setting a tougher standard for U.S. drone attacks, but having to acknowledge this week an American strike killed two Western hostages. And we're back now with the panel. Julie, it was clear from a couple of appearances President Obama made the end of this week that he is -- I don't think it's overstating it to say, anguished by this accident and the fact that two Western hostages, let's put their pictures up on the screen, American Warren Weinstein and Italian Giovanni Lo Porto were killed in this U.S. strike on an al Qaeda compound. What do you think of the chances that he will change U.S. drone policy dramatically as a result?

PACE: I think the chances of a dramatic change are pretty low. I think you may see some tweaks around the edges. But I think he's going to continue to use drones in Pakistan, Afghanistan, Yemen. This has become so central to his foreign policy philosophy, to his fight against terrorism that I think to see a major overhaul is really unlikely at this point. But I do think that this raises the question when he said that we were not going to take strikes unless there was a near certainty that civilians would not be killed. How can you -- how can you be sure of that? I mean, that is the question that I think the administration is going to have to answer. And it's going to be difficult for them to answer as long as they continue to try to keep so much of this program secret.

WALLACE: We'll get to that in a moment. We asked you for questions for the panel and we got a bunch on Facebook like these. Katie Coyle writes, "What has happened to our intelligence agency? Why don't we have better intel?" And Yvonne Horn sent this, "How do you get information by killing everyone?" Karl, I guess, two questions. How -- how do you answer them? Do you -- how much do you fault the CIA for failing to know that these two hostages were in this compound? And are we doing enough to capture instead of kill terrorists who might give us better intel on what's going on?

ROVE: Well, first of all, my understanding is there may have been 100 hours of surveillance of this facility and they didn't detect the presence of these two hostages. This is what happens in war. And particularly when we're in a war, in territorial areas of Pakistan that are not under control of central government, and which we have very few assets. I would say this. I believe the president is right to pursue this drone policy. But I do think a mistake was made in changing an important policy that we had. The Joint Special Operations commander McChrystal and McRaven had policy of apprehending, detaining and interrogating. And this administration ordered those responsibilities to detain and to interrogate to be turned over to the Iraqis and the Afghans. And the amount of intelligence that we gathered as a result, my understanding is, dramatically dropped. So, we got less information that -- I don't know if we said there are two hostages there, but we're certainly getting less information by killing people and not detaining them and interrogating them.

WALLACE: Do you think part of that is because of this president's will (ph) to close Guantanamo?

ROVE: Well, that's right. A part of it is that. Because he stopped sending people to Guantanamo. And I understand his -- what he said during the 2008 campaign. But he has found no way to close Guantanamo. And there needs to be a facility, in which we can take people off the battlefield and interrogate them. JSOC was doing it by not sending people to Guantanamo, but even that was ended.

WALLACE: Go ahead.

FOURNIER: I don't know how in the world closing this loophole would have any effect on whether or not we know whether these drone strikes are going to be effective. I think anybody who has ever -- who has a problem like I do with this drone strategy, still has a problem. And maybe more so, the fact that the president promised that he was going to be transparent about this program. That we would have an honest debate about whether or not this is something we need to do. And how we go about doing it. And he broke that promise. Either because he knew at the time he was going to break that promise, and he was just trying to put it off, or because he's incapable of leading his own administration to the place where he said he would two years ago.

We found out today in the New York Times that literally the same person at the CIA that oversaw the torture program, that a lot of people have a problem with, including me, also oversee the drone program. Why is it we have to wait for "The New York Times" to discover that? Why isn't it something that the administration is being honest about as they try to lead us into what is a very ill-shadowy war with no (INAUDIBLE) answer?

WALLACE: Ron, what is it you're asking for?

(CROSSTALK)

FOURNIER: But please, be honest with us.

I want the president of the United States to keep his word. He said he was going to be transparent, about how, about why and how we conduct war from a robot in the air blowing people away. Some bad guys ...

WALLACE: But when you say transparent, what is it that you would like to know? I mean he ...

FOURNIER: I looked at the rules of engagement. How -can we really -- when the president of the United States says we're going to deal with near certainty, really? How do you come up with near certainty? Is that just a talking point that you say two years ago and then we find out that you can't do it? Let's put some meat on the bones, Mr. President.

HUME: It seems to me that they probably had near certainty. What they didn't have was actual certainty. And that's always going to be the case. It seems to me there are two separate questions here. One is, whether it's a wise policy to basically eschew this business of trying to capture these terrorists, this enemy for interrogation purposes and whether they kill some of them with drones.

Now, the president seems to be all drones all the time now. Look, war's hell. And innocent people get killed in war. And if you're dealing with a ruthless enemy who doesn't play by the rules and keeps captives in proximity to their fighters, some of this is going to happen. It's terrible that it does. It's a tragedy for the families. But the idea that we're going to now start to make known to the public, all of our rules of engagement so that the enemy knows them as well and disclose all of our war-fighting plans in that way seems to me as crazy. This is a shadowy war as Ron correctly pointed out, but it has to be a shadowy war because of the nature of the enemy.

FOURNIER: But we don't have to give away all of our secrets and all the rules of engagement. Kind of have a transparent or honest debate that the president promised.

WALLACE: Well, let me ask you about ...

(CROSSTALK)

HUME: Honest debate would have saved these lives.

WALLACE: Well, let me -- No. But I suppose the argument is that it would have given more information to the American people. One of the things that's being ...

ROVE: The Americans support this program overwhelmingly.

WALLACE: I understand that. But let me ask you this. What about one of the things that's being talked about now as a fuller, clearer, more specific accounting of civilian casualties as a result of this? Do you think that's good or unnecessary?

ROVE: Well, I think that's all -- that also gets us into murky territory. Because again, many of these drone strikes take place in parts of the world where we don't have people on the ground and where we don't have allies with people on the ground. So, a clear -- you know, there are fewer drone strikes in the Bush administration because it was a new technology. But I know even then there was difficulty in ascertaining exactly what happened in some of these places because it might be weeks or months before we ever got either people there or had people who had gotten there and reported back.

WALLACE: Do you buy that?

FOURNIER: I buy it's not an easy thing. But I also buy the fact that the president of the United States made a lot of sense to me two years ago when he said that we can talk more openly about what we're doing and have an honest debate. And he either didn't mean it or he wasn't able to do it.

PACE: Well, it's one of those things that it's easier to say and then you actually get into the discussion about what you're going to make public and suddenly intel guys, military guys are saying, we can't make that public. We can't make that public, and you are off with a pretty small ...

(CROSSTALK)

FOURNIER: It takes a civilian government ...

PACE: Absolutely.

FOURNIER: ... or a strong leader to say, you know what, this is a democracy. We can talk about what we're doing.

HUME: If we tried to fight World War II by the standards of perfection and perfect accuracy that are being sought now, we couldn't have fought the war. And I've just been reading that long wonderful history -- Attkinson (ph) history of World War II. The number of mistakes and blunders is breathtaking, yet we won the war and everybody looks back on it as the good war.

WALLACE: All right. Thank you, panel. Good discussion. See you all next week. Well, they held the White House correspondents' dinner last night, also called the nerd prom, where we reporters get to pretend we're friends with Hollywood stars. President Obama spoke and brought on his anger translator to say the things he was really thinking.

(BEGIN VIDEO CLIP)

OBAMA: Despite our differences, we count on the press to shed light on the most important issues of the day.

UNIDENTIFIED MALE: And we can count on Fox News to terrify all white people with the nonsense!

(LAUGHTER)

(APPLAUSE)

UNIDENTIFIED MALE: So (INAUDIBLE)

(LAUGHTER)

(END VIDEO CLIP)

WALLACE: Up next, our "Power Player of the Week," the head of the National Institutes of Health. A man of science and faith.

(COMMERCIAL BREAK)

WALLACE: He rides a Harley and plays a mean guitar which makes what he does even more interesting. Here's our power player of the week.

(BEGIN VIDEOTAPE)

DR. FRANCIS COLLINS, NIH DIRECTOR: NIH probably has a bigger effect on your daily life than almost any other government agency.

WALLACE: Dr. Francis Collins is director of the National Institutes of Health. The biggest supporter of biomedical research in the world. On a campus outside Washington, 17,000 scientists work in 27 different institutes coming up with breakthrough cures and treatments for disease.

COLLINS: We are the house of hope. This is where people come to when everything else has sort of stopped working.

WALLACE: Collins is talking about the NIH clinical center, the world's largest research hospital.

COLLINS: Now at least for some patients, we have a Lazarus opportunity for people who are in terrible shape to be able to recover.

WALLACE (on camera): What is a Lazarus opportunity?

COLLINS: They get into a clinical trial to try a brand new therapeutic that is still very much under study and they have this dramatic response, and they go home and go back to work.

WALLACE (voice over): And all of that is the tip of the iceberg for NIH, which gives out 90 percent of funds in research grants to outside programs. Which brings us to money. The NIH budget this year is $31 billion, which after spending cuts and sequestration, is where NIH was 12 years ago. What does that mean for research grants?

COLLINS: Traditionally we could fund about a third of those. Now we're down to funding about a sixth of those. And that means about half of the science is left on the table. At a time of such great promise.

WALLACE: Collins knows about scientific breakthroughs. He led the human genome project that in 2003 announced it had mapped the full sequence of human DNA.

COLLINS: Inside each cell of your body is this instruction book made up of 3 billion letters of the DNA code. If you know the reference genome for that person, and you look at their cancer, you can see what happened, or, that T should have been a C and now that gene is overactive.

(SINGING)

WALLACE: Francis Collins is not your typical scientist. He plays a guitar adorned with a DNA helix, he rides Harleys and he's written a book about his belief in God.

WALLACE (on camera): How controversial was that in the scientific community?

COLLINS: It stirred things up a bit. There is some questions science is poorly designed to deal with like why are we here? That's where for me, faith comes in and understanding that science limits, the question, that you can ask, so let's find another way.

WALLACE (voice over): While he's asking those questions, he'll keep working in the most powerful job in American science.

COLLINS: I'm a physician. I got into medicine hoping that I could help people. We have 7,000 diseases for which we know the molecular cause. We only have treatments for 500 of them. And to be able to stand at the helm of this amazing place and steer that forward is a dream come true.

(END VIDEO CLIP)

WALLACE: Have a great week and we'll see you next "Fox News Sunday."

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